Two years after three major music companies sued Suno in the United States over training its artificial intelligence (AI) model on unlicensed music, Universal Music Group (UMG) and Sony Music remain in litigation with the AI music firm.
At the same time, Suno has reached agreements with other large music companies:
- Warner Music Group (WMG) exited the copyright lawsuit in November by signing a settlement that requires Suno to develop a new model based on licensed music.
- BMG, which was not part of the litigation, signed a similar deal this month.
Suno, valued at $5.4 billion in its latest funding round, is now pursuing two potentially contradictory strategies: arguing in court against UMG and Sony that it does not have to pay for AI training data, while paying for training data from two of their competitors.
"Suno may be in a little bit of a conundrum," said David Martinez, a partner at Robins Kaplan who specializes in intellectual property litigation.
Fair use and market impact#
That conundrum centers on fair use, the legal principle that allows copyrighted works to be reused for free in certain situations. Suno, like dozens of other AI companies facing litigation, has argued that fair use allows it to ingest copyrighted music into its model without licenses in order to fuel technological innovation. At least one U.S. judge has sided with the AI industry on this in a case brought by book authors against Anthropic, the company behind the chatbot Claude.
In the Suno case, a U.S. judge has not yet decided whether fair use applies to training on unlicensed music. A German court said in a landmark ruling last month that it does not.
One factor courts consider in fair use decisions is market impact, whether the new use deprives a copyright holder of current or potential income. UMG and Sony have argued that Suno’s licenses with other music companies are evidence of AI music’s market impact. Their lawyers wrote in an April court filing that the WMG settlement "bears directly" on that question.
"Suno’s agreement with Warner to license sound recordings as training data is direct evidence that a market for such licenses exists," wrote UMG and Sony’s attorneys. "Suno’s agreement with Warner is evidence that Suno’s models do, in fact, rely on copyrighted sound recordings and that there exist options to satisfy Suno’s need to acquire such copyrighted works for training."
David Leichtman, a partner at Ellenoff Grossman & Schole who handles music copyright cases, said Suno’s licenses with WMG and BMG could "absolutely" be leveraged by UMG and Sony as part of the fair use inquiry. He said judges can consider whether a licensing market for a copyrighted work was "likely to be developed" at the time of the alleged infringement.
"Here, the proof is in the pudding because these other entities, Warner and BMG, have been able to reach agreement on a licensing deal with the very defendant at issue," Leichtman said. "So, I think a court would be hard-pressed to say a licensing market is not likely to be developed."
Suno’s counterarguments#
That argument is not a slam dunk. Some courts have refused to consider licensing deals as evidence of market harm. In another major AI case against Meta, a judge ruled last year that such an argument is "circular," since it would allow copyright owners to simply ink licenses and then sue those who will not come to the table.
Suno has cited that ruling in the battle with UMG and Sony, arguing in an April filing that "lost licensing opportunities for a transformative use are not a legally cognizable harm." Suno’s lawyers also wrote in July that the WMG settlement proves nothing because it was "shaped by litigation risk, not by the competitive forces that define a functioning market."
"Plaintiffs are incorrect that the settlement is probative of whether there is a viable actual or potential market to license Plaintiffs’ sound recordings for use as training data," wrote Suno’s attorneys. "That Suno entered a global settlement with one rightsholder after many months of hard-fought litigation does not show whether a licensing market exists."
Tori Noble, a staff attorney at the digital rights nonprofit Electronic Frontier Foundation, said the earlier ruling for Meta, and Suno’s argument citing it, are "probably the most correct outcome on the law."
"Otherwise, you could end up in a situation where the rightsholder could create a market for licenses that they don’t have a right to license," Noble said. "In effect, extending a licensing market here just because one already exists would almost be like letting someone put up gates around a public park and charge for access."
A source familiar with Suno’s case said, "Copyright is about the advancement of arts and sciences, and factoring settlements into whether there’s a market for something is inherently anti-innovation."
"Copyright owners are essentially well-organized monopolists, and innovators are often bootstrapped or venture-backed small companies," the source added. "Lawsuits are expensive, so settlements are more an indication of that lopsided power dynamic and the desire to pay a one-time fee to stop litigating, than an indication of where we should balance the copyright monopoly with innovation."
Representatives for Universal Music Group, Sony Music and Warner Music Group declined to comment. BMG did not return a request for comment.
